Here is the earnings release:
Tuesday July 15 7:41 AM EDT
Company Press Release
Source: ChiRex Inc.
ChiRex Reports Financial Results for Second Quarter 1997
Second Quarter 1997 EPS Increases 50% to $0.15
WELLESLEY, Mass., and DUDLEY, Northumberland, England, July 15
/PRNewswire/ -- ChiRex Inc. (Nasdaq:CHRX) announced today second quarter
results for the period ending June 30, 1997.
For the second quarter 1997, the Company reported total revenues of $20.2 million compared to $22.0 million in the
second quarter 1996. Net income from operations, before non-recurring items relating to the disposition of the
acetaminophen business, in the second quarter 1997 increased to $1.7 million, or $0.15 per share, compared to second
quarter 1996 net income of $1.1 million, or $0.10 per share. Gross profit improved to $6.3 million, or 31.5% in the
second quarter 1997, compared with a gross profit of $6.1 million, or 27.9% in the same period in 1996. The improved
gross profit reflects the Company's continuing strategy to eliminate low-margin non-core products and to replace these
products with higher-margin core-product revenues.
For the six months ending June 30, 1997, the Company reported total revenues of $46.7 million compared to $44.8 million
in the same period in 1996. Net income from operations, before non-recurring items relating to the disposition of the
acetaminophen business, in the six months ending June 30, 1997, increased to $2.9 million, or $0.25 per share, compared
to net income of $1.7 million or $0.15 per share in the same period in 1996. Gross profit improved to $12.3 million or
26.3% in the six months ending June 30, 1997, compared with a gross profit of $11.0 million, or 24.4% in the same
period in 1996.
Revenues from the Company's core products, increased 19.3% to $13.6 million in the second quarter of 1997, compared
to $11.4 million in the second quarter 1996. Revenues from the Company's core products, increased 41.5% to $30.9
million in the six months ending June 30, 1997, compared to $21.9 million in the same period in 1996.
``Our second quarter increase in gross margins demonstrates our commitment to replacing our low-margin, non-core
products with higher-margin, core products,'' stated Alan R. Clark, Chairman and Chief Executive Officer. Mr. Clark
added, ``Combined with our recent announcement to purchase Glaxo Wellcome's pharmaceutical manufacturing facility in
Annan, Scotland, we are continuing to fulfill ChiRex's growth strategy.''
ChiRex is a Contract Manufacturing Organization serving the outsourcing
needs of the pharmaceutical industry through its extensive pharmaceutical fine
chemical manufacturing and process development capabilities and proprietary
technologies. The Company supports and supplements the in-house development
and manufacturing capabilities of its pharmaceutical and biotechnology
customers with a broad range of fully-integrated services, accelerating the
time from drug discovery to commercialization. ChiRex currently produces over
50 products, of which 29 are core products, in its world-class, cGMP
manufacturing facilities located in Dudley, Northumberland, England. ChiRex
holds 54 patents and patent applications in the field of chiral chemistry.
Any statements contained in this release that relate to future plans, events or performance including the scheduled
disposition of the acetaminophen business, are forward-looking statements that involve risks and uncertainties, including,
but not limited to, product development and market acceptance risks, product manufacturing risks, the impact of
competitive products and pricing, the results of current and future licensing and other collaborative relationships, the results
of financing efforts, developments regarding intellectual property rights and litigation, risks of product nonapproval or
delays or post-approval reviews by the FDA or foreign regulatory authorities, and other risks identified in ChiRex Inc.'s
Securities and Exchange Commission filings. Actual results, events or performance may differ materially. Readers are
cautioned not to place undo reliance on these forward-looking statements, which speak only as the date hereof. ChiRex
undertakes no obligation to publicly release the results of any revisions to these forward- looking statements that may be
made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
CHIREX INC.
Consolidated Income Statements
(In thousands, except per share amounts)
Three months ended Six months ended
June 30 June 30
1996(A) 1997 1996(A) 1997
Core sales $11,378 $13,570 $21,860 $30,920
Non-core sales 3,258 1,290 7,442 3,237
Acetaminophen 7,058 5,136 14,880 12,123
21,694 19,996 44,182 46,280
License and royalties 282 161 605 383
Total revenues 21,976 20,157 44,787 46,663
Cost of sales (15,846) (13,811) (33,837) (34,402)
Gross profit 6,130 6,346 10,950 12,261
Gross margin 27.9% 31.5% 24.4% 26.3%
Selling, general,
and administrative (2,724) (2,272) (4,508) (4,566)
Research and development (832) (1,270) (1,825) (2,457)
EBIT 2,574 2,804 4,617 5,238
Interest Income/(expense) (379) 59 (1,110) (75)
Profit before tax 2,195 2,863 3,507 5,163
Tax (814) (867) (1,245) (1,678)
Profit after tax 1,381 1,996 2,262 3,485
Goodwill (288) (291) (348) (582)
Dividends -- -- (216) --
Net income $1,093 $1,705 $1,698 $2,903
Shares outstanding 11,245 11,524 11,245 11,524
EPS $0.10 $0.15 $0.15 $0.25
EBITDA $4,982 $4,954 $8,812 $9,675
Less non-recurring charges:
Pre-acquisition losses -- -- (149) --
Stock options -- -- (5,611) --
In-process development -- -- (5,790) --
Fair value of
inventory uplift (net) (929) -- (1,204) --
Proceeds from disposition
of acetaminophen business -- 6,308 -- 6,308
Restructuring and
other costs -- (12,901) -- (12,901)
Tax effect of proceeds
and restructuring costs -- 2,194 -- 2,194
(929) (4,399) (12,456) (4,399)
Net income $164 ($2,694) ($11,056) ($1,496)
(A) Presented on a pro forma as adjusted basis.
Selected Balance Sheet Information
(in thousands)
December 31, June 30,
1996 1997
Cash $291 $2,743
Working Capital 15,448 22,923
Property, Plant and Equipment, net 61,349 51,634
Total Assets 130,806 131,558
Long Term Debt 3,933 --
Shareholders' Equity 90,068 91,510
SOURCE: ChiRex Inc.
Contact: Michael A. Griffith, Chief Financial Officer of ChiRex Inc., 617-431-2200; or Douglas E. MacDougall, Manager of Feinstein Kean
Partners Inc., 617-577-8110
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